Group crowdfunding crypto to apply to ICANN for blockchain gTLD

Do we have our first confirmed blockchain-themed new gTLD application? Looks like it.

A group of pseudonymous individuals have announced plans to apply to ICANN for .dao in the next round, and are currently crowdfunding the project by asking for donations in the Ethereum cryptocurrency.

Going by the name DomainDAO, they say they’ve raised 230 ETH so far, which appears to be worth over $430,000 at today’s rates, already probably enough for a bare-bones new gTLD application.

They want to apply for .dao, an acronym for “decentralized autonomous organization”, a type of entity where token-owning participants set the direction of the DAO via rules laid down in software and votes encoded into a blockchain.

DomainDAO’s web site takes a few pops at the likes of Verisign and Identity Digital owner Ethos Capital for alleged unethical practices and says the goal is for .dao to one day “supersede” .com.

The concept differs from other blockchain-based TLD projects, such as Unstoppable Domains, in that it’s not alt-root. The plan is to apply to ICANN to get into the authoritative, consensus DNS root, so that .dao domains can be used by all.

Unstoppable already runs .dao in its own alt-root, selling domains for $20, and has recently proven litigious when it smells a collision from a competing project.

But the main roadblock to the root may well be ICANN itself.

While the rules governing the next round of gTLD applications are not yet set in stone, it strikes me as incredibly unlikely that ICANN will entertain a bid from an applicant that is not a recognized legal entity with a named board of directors that can be subjected to background screening.

DomainDAO is itself a DAO, and the DAO concept is reportedly prone to corruption and hacking, which could make ICANN nervous.

In addition, people funding DomainDAO today are offered crypto tokens that can be redeemed for second-level domains if the TLD eventually goes live — it’s essentially already selling pre-registrations — which could interfere with rights protection mechanisms, depending on implementation.

But DomainDAO claims to have an industry Greybeard on the payroll, a senior advisor going by the handle “Speech-less”, an “Executive with 20+ years experience in domain and ICANN”.

If that’s you, we probably already know each other. Why not get in touch to tell me why this thing is going to work?

Bugatti dumps dot-brand under new owners

Bugatti, which makes incredibly expensive limited-edition sports cars, is dropping its dot-brand.

The French company asked ICANN to release it from its .bugatti registry contract about a month ago, according to ICANN documents.

Bugatti entered new ownership last November, under a joint venture between Rimac and Porsche, and recently reportedly underwent a branding overhaul.

It seems the dot-brand had no place under the new marketing strategy.

Its previous owner had been Volkswagen, which still has a (unused) dot-brand, despite dumping its Chinese-script equivalent. But Porsche had been an opponent of the new gTLD program back in 2011.

.bugatti had actually been used, albeit lightly. A couple of live, non-redirecting sites still remain.

Over 100 dot-brands have terminated their contracts to date.

Early “dot-brand” adopter wants to scrap its gTLD

One of the first adopters of the dot-brand gTLD concept, which has an active portfolio of resolving domains, has asked ICANN to tear up its registry contract.

The Australian Cancer Research Foundation said it no longer wishes to operate .cancerresearch, which it has used since 2014.

It’s a bit of a strange, possibly unique, situation, which may explain why its termination request, submitted in April, is only now being published by ICANN.

Technically, .cancerresearch was more like a closed generic than a dot-brand. It did not have a trademark on the string or the Specification 13 exceptions in its registry contract, which would make it a dot-brand.

Instead, ACRF had the TLD delegated, registered a bunch of resolving names to itself, and never officially launched. There was never even a sunrise period.

Pretty significant loophole in the rules for the 2012 application round if you ask me.

But ICANN is treating .cancerresearch as if it was a dot-brand anyway. Because nobody except ACRF ever owned any domains there, there’s no need to transition to a new registry to protect registrants.

This also means nobody else will be able to apply for the same string for two years, assuming an application window opens in that period.

ACRF still has live non-redirecting web sites on domains such as lung.cancerresearch, breast.cancerresearch and donate.cancerresearch.

It’s the first gTLD termination request since last October.

“GDPR is not my fault!” — ICANN fears reputational damage from Whois reform

Damned if we do, damned if we don’t.

That seems to an uncomfortable message emerging from ICANN’s ongoing discussions about SSAD, the proposed Standardized System for Access and Disclosure, which promises to bring some costly and potentially useless reform to the global Whois system.

ICANN’s board of directors and the GNSO Council met via Zoom last night to share their initial reactions to the ICANN staff’s SSAD Operational Design Assessment, which had been published just 48 hours earlier.

I think it’s fair to say that while there’s still some community enthusiasm for getting SSAD done in one form or another, there’s much more skepticism, accompanied by a fear that the whole sorry mess is going to make ICANN and its vaunted multistakeholder model look bad/worse.

Some say that implementing SSAD, which could take six more years and cost tens of millions of dollars, would harm ICANN’s reputation if, as seems quite possible, hardly anyone ends up using it. Others say the risk comes from pissing away years of building community consensus on a set of policy recommendations that ultimately don’t get implemented.

GNSO councillor Thomas Rickert said during yesterday’s conference call:

One risk at this stage that I think we need to discuss is the risk to the credibility of the functionality of the multi-stakeholder model. Because if we give up on the SSAD too soon, if we don’t come up with a way forward on how to operationalize it, then we will be seen as an organization that takes a few years to come up with policy recommendations that never get operationalized and that will certainly play into the hands of those who applaud the European Commission for coming up with ideas in NIS2, because obviously they see that the legislative process at the European and then at the national state level is still faster than ICANN coming up with policies.

NIS2 is a formative EU Directive that is likely to shake up the privacy-related legal landscape yet again, almost certainly before ICANN’s contractors even type the first line of SSAD code.

While agreeing with Rickert’s concerns, director Becky Burr put forward the opposing view:

The flip side of that is that we build it, we don’t have the volume to support it at a reasonable cost basis and it does not change the outcome of a request for access to the Whois data… We build it, with all its complexity and glory, no one uses it, no one’s happy with it and that puts pressure on the multi-stakeholder model. I’m not saying where I come out on this, but I feel very torn about both of those problems.

The ODA estimates the cost of building SSAD at up to $27 million, with the system not going live until 2027 or 2028. Ongoing annual operating costs, funded by fees collected from the people requesting private Whois data, could range from $14 million to $107 million, depending on how many people use it and how frequently.

These calculations are based on an estimated user base of 25,000 and three million, with annual queries of 100,000 and 12 million. The less use the system gets, the higher the per-query cost.

But some think the low end of these assumptions may still be too high, and that ultimately usage would be low enough to make the query fees so high that users will abandon the system.

Councillor Kurt Pritz said:

I think there’s a material risk that the costs are going to be substantially greater than what’s forecast and the payback and uptake is going to be substantially lower… I think there’s reputational risk to ICANN. We could build this very expensive tool and have little or no uptake, or we could build a tool that becomes obsolete before it becomes operational.

The low-end estimates of 25,000 users asking for 100,000 records may be “overly optimistic”, Pritz said, given that only 1,500 people are currently asking registrars for unredacted Whois records. Similarly, there are only 25,000 requests per year right now, some way off the 100,000 low-end ODA assumption, he said.

If SSAD doesn’t even hit its low-end usage targets, the fee for a single Whois query could be even larger than the $40 high-end ODA prediction, creating a vicious cycle in which usage drops further, further increasing fees.

SSAD doesn’t guarantee people requesting Whois data actually get it, and bypassing SSAD entirely and requesting private data directly from a registrar would still be an option.

There seems to be a consensus now that GDPR always requires registries and registrars to ultimately make the decision as to whether to release private data, and there’s nothing ICANN can do about it, whether with SSAD or anything else.

CEO Göran Marby jokingly said he’s thinking about getting a T-shirt printed that says “GDPR was not my fault”.

“The consequences of GDPR on the whole system is not something that ICANN can fix, that’s something for the legislative, European Commission and other ones to fix,” he said. “We can’t fix the law.”

One idea to rescue SSAD, which has been floated before and was raised again last night, is to cut away the accreditation component of the system, which Marby reckons accounts for about two thirds of the costs, and basically turn SSAD into a simplified, centralized “ticketing system” (ironically, that’s the term already used derisively to describe it) for handling data requests.

But the opposing view — that the accreditation component is actually the most important part of bringing Whois into GDPR compliance — was also put forward.

Last night’s Zoom call barely moved the conversation forward, perhaps not surprisingly given the limited amount of time both sides had to digest the ODA, but it seems there may be future conversations along the same lines.

ICANN’s board, which was in “listening mode” and therefore pretty quiet last night, is due to consider the SSAD recommendations, in light of the ODA, at some point in February.

I would be absolutely flabberghasted if they were approved in full. I think it’s far more likely that the policy will be thrown back to the GNSO for additional work to make it more palatable.

Whois reform to take four years, cost up to $107 million A YEAR, and may still be pointless

ICANN’s proposed post-GDPR Whois system could cost over $100 million a year to run and take up to four years to build, but the Org still has no idea whether anyone will use it.

That appears to be the emerging conclusion of ICANN’s very first Operational Design Phase, which sought to translate community recommendations for a Standardized System for Access and Disclosure (SSAD) into a practical implementation plan.

SSAD is supposed to make it easier for people like trademark owners and law enforcement to request personal information from Whois records that is currently redacted due to privacy laws such as GDPR.

The ODP, which was originally meant to conclude in September but will now formally wrap up in February, has decided so far that SSAD will take “three to four years” to design and build, costing between $20 million and $27 million.

It’s calculated the annual running costs at between $14 million and $107 million, an eye-wateringly imprecise estimate arrived at because ICANN has pretty much no idea how many people will want to use SSAD, how much they’d be prepared to pay, and how many Whois requests they will likely make.

ICANN had previously guesstimated startup costs of $9 million and ongoing annual costs around the same level.

The new cost estimates are based on the number of users being anywhere between 25,000 and three million, with the number of annual queries coming in at between 100,000 and 12 million.

And ICANN admits that the actual demand “may be lower” than even the low-end estimate.

“We haven’t been able to figure out how big the demand is,” ICANN CEO Göran Marby told the GNSO Council during a conference call last month.

“Actual demand is unknowable until well after the launch of the SSAD,” an ICANN presentation (pdf) states. The Org contacted 11 research firms to try to get a better handle on likely demand, but most turned down the work for this reason.

On pricing, the ODP decided that it would cost a few hundred bucks for requestors to get accredited into the system, and then anywhere between $0.45 and $40 for every Whois request they make.

Again, the range is so laughably broad because the likely level of demand is unknown. A smaller number of requests would lead to a higher price and vice versa.

Even if there’s an initial flurry of SSAD activity, that could decline over time, the ODP concluded. In part that’s because registries and registrars would be under no obligation to turn over records, even if requestors are paying $40 a pop for their queries.

It’s also because SSAD would not be mandatory — requestors could still approach contracted parties directly for the info they want, for low or no cost, if they think the price of SSAD is too high or accreditation requirements too onerous.

“There’ll always be a free version of this for everybody,” Marby said on the conference call.

In short, it’s a hell of a lot of money for not much functionality. There’s a better than even chance it could be a huge waste of time and money.

An added complication is that the laws that SSAD is supposed to address, mainly GDPR, are likely to change while it’s being implemented. The European Union’s NIS2 Directive stands to move the goalposts on Whois privacy substantially, and not uniformly, in the not-too-distant future, for example.

This is profoundly embarrassing for ICANN as an organization. Created in the 1990s to operate at “internet speed”, it’s now so bloated, so twisted up it its own knickers, that it’s getting lapped by the lumbering EU legislative process.

The ODP is set to submit its final report to ICANN’s board of directors in February. The board could theoretically decide that it’s not in the interest of ICANN or the public to go ahead with it.

Marby, for his part, seems to be thinking that there could be some benefit from a centralized hub for submitting Whois requests, but that it should be simpler than the current “too complex” proposal, and funded by ICANN.

My take is that ICANN is reluctant to move ahead with SSAD as it’s currently proposed, but because top-down policy-making is frowned upon its hands are tied to make the changes it would like to see.

CentralNic says it’s making more money than expected

Domain all-rounder CentralNic this morning told the markets it thinks it will hit or beat expectations this year.

CEO Ben Crawford said in a statement this morning that at the end of 2021 the company expects to be “at or above” analyst estimates of $348.6 million to $355.3 million at the top line and profit of $41.1 million to $42.0 million.

For the nine month ended September 30, CentralNic expects revenue to come in at $280 million or above, with adjusted EBIDTDA of at least $32 million, up 66% and 45% respective on the same 2020 period.

That represents organic growth, normalizing the impact of acquisitions, or 29%, the company said.

While the company did not reveal the drivers behind its growth, in recent quarters the best performer has been its domain monetization business, which provides revenue from parking ads and traffic redirection.

It will report its results November 22.

Dead dot-brands top 100. Here’s the list and breakdown

The list of dot-brand gTLDs that have had their ICANN registry contracts torn up has now topped 100.

SC Johnson, the big American cleaning products company, has informed the Org it no longer wishes to run .afamilycompany, .duck, .glade, .off, .raid, and .scjohnson.

Regular readers will know that I’ve been keeping a running tally of dot-brand terminations for the last several years, and according to that tally that number is now 101.

But it’s a bit more complex than that, so I thought I’d use the occasion of this milestone to provide a more substantial breakdown.

ICANN has records for 104 dot-brands either being terminated by ICANN or asking to be terminated of their own accord.

The number of registry-initiated termination requests is 90. These are typically gTLDs that were never used, or were experimented with and then abandoned. A smaller number relate to brands that were discontinued following mergers or product end-of-life, rendering the dot-brand pointless.

ICANN initiated the other 14 terminations, mostly because the registry operator got cold feet during the pre-delegation testing phase, before going live, but also in one instance for non-payment of fees and in two cases whatever the hell this is.

Six of the registry-initiated transfer requests were withdrawn before being fully processed. Of those, three (.boots, .mobily, and its Arabic translation) went on to be terminated anyway.

Two registries filed for self-termination then changed their minds and committed auto-genericide by selling their contracts — for .bond and .sbs — to discounting portfolio registry ShortDot instead.

One dot-brand, .case, withdrew its December 2020 termination request and appears to still be active.

Thirteen termination requests are currently in the system but have not yet been fully processed.

Five dot-brand gTLD contracts — .observer, .quest, .monster, .select, .compare — were sold to other registries to be repurposed as open generics. You could add .cyou to that list, depending on how you define a dot-brand.

One gTLD that was originally a generic — .moto — made the move in the other direction to become a dot-brand.

Here’s the list of dot-brands that have either requested a termination, or been terminated.

[table id=67 /]

ICANN spills beans on Marby’s million-dollar payday

ICANN appears to have increased its transparency when it comes to executive pay, at least when it comes to the CEO.

Göran Marby was revealed earlier this year to have banked more than $1 million in ICANN’s fiscal 2020, and he received another 5% boost at a board meeting this February.

Six months later, the board of directors has finally approved the minutes of that meeting, and for the first time it actually minutes the meeting, revealing the contents of the discussion and the names of the three dissenting directors.

In the past, minutes of decisions involving pay typically just restate the resolution and rationale with no additional context. They don’t usually even reveal the vote tally.

According to the minutes, there was some debate about the method used to determine how much Marby should be paid.

ICANN’s longstanding policy has to offer executive pay within the “50% and 75% percentile of comparable position salaries” in the general for-profit industries, high-tech industry, and non-profits.

What often bothers ICANN watchers, and bothered some directors in February, is how these three comparable industries are mixed and weighted when figuring out how much an ICANN employee is worth.

If high-tech is given more weight, that would pull in the direction of a higher salary. If non-profits were weighted more, that would pull in the opposite direction.

According to the minutes, Avri Doria raised this issue in February, suggesting that non-profit salaries should be more influential in the mix, when future CEOs are selected.

Chair Maarten Botterman said in the minutes that the blend of comparisons doesn’t really matter all that much because Marby’s compensation is “well below” the percentile threshold ICANN has set itself, regardless of the mix.

The discussion continued:

Nigel Roberts noted that looking at sectors other than non-profit is important because while ICANN might not be a big commercial company, it is certainly in competition with those companies for executive leadership candidates and that he believes ICANN needs to compensate well because of that. Becky Burr similarly noted that it is important to understand from where ICANN is drawing its leadership so that the compensation can be competitive, while also acknowledging that the compensation level under discussion is below the target range.

The problem with these arguments is that Marby was not hired from any of the three sectors ICANN uses for comparison.

While he has a background in tech, he was a telecoms regulator on a government salary in Sweden when he applied for the ICANN gig. He’s being paid more than his predecessors who did come directly from high-tech.

The minutes go on to note that director Ihab Osman pointed out that Marby gets paid more than the secretary-general of the United Nations and the CEO of the American Red Cross.

He wondered aloud whether the skill set of an ICANN CEO is the same as a high-tech CEO, while director Mandla Msimang questioned whether ICANN’s revenue should play a factor in setting compensation.

Osman also noted the potentially poor optics of giving Marby a big pay rise in the midst of a pandemic.

When it came to a vote, Doria, Osman and Msimang all voted against the 5% pay increase, but the remaining 11 directors voted in favor. Marby and Ron Da Silva were not present for the discussion.

Nominet names new chair, slashes exec pay, promises reforms and more boardroom exits

Nominet has named its new chair as former BT Openworld CEO Andy Green, who has already laid out a suite of measures — including more blood on the boardroom floor — to address the barrage of criticisms from members who ousted his predecessor earlier this year.

Green is a serial director, with previous board and advisory positions at over a dozen other companies and organizations, mostly in technology and telecommunications.

Nominet, in announcing his appointment, highlighted that he’s a National Infrastructure Commissioner, chair of WaterAid UK, and vice chair of the Disasters Emergency Committee.

He’s got a foot in both the worlds of internet infrastructure and public-benefit causes, in other words — a CV seemingly ideal for the role at this time in Nominet’s troubled history.

In an email to members last week, Green said:

The EGM in March showed that Nominet has failed over a number of years to sufficiently engage with members about the scope and direction of the company. I start my term as Chairman committed to controlling costs (including executive pay), delivering value to members, restoring Nominet’s reputation for great public benefit work at scale and communicating transparently with members about the future direction of Nominet.

March’s Emergency General Meeting was called by members that Nominet seemed to be acting more as a commercial player rather than a public-benefit member organization, more concerned with branching out into new markets and stuffing its directors wallets than focusing on .uk and giving profits to charitable causes.

The EGM saw members narrowly vote to kick out almost half of the board, including the chair. Then-CEO Russel Haworth had quit just a few days earlier, before he too could be ejected.

Green said he wants to “reset the relationship with members starting now”.

He announced six reviews covering controversial areas including registry fees, executive/director compensation, charitable giving, member engagement and non-core services.

He also said that he expects that, following its Annual General Meeting on September 22, more than half of the board of directors will comprise people who were not in place prior to the March EGM.

By next year’s AGM, the board would be “substantially replenished”, he said.

Executives are also getting a battering — Green announced that Nominet has closed its long-term incentives scheme, “which will mean significantly reduced remuneration overall for senior executives”.

The company has named another new director, Eva Lindqvist, who as new chair of the board’s Remuneration Committee will oversee who gets paid what.

No more acquisitions for Nominet

Nominet isn’t in the market for buying up other companies any more.

The .uk registry said today that its board of directors has dissolved its mergers and acquisitions committee, which means no more deals in the rapidly consolidating domain name space for the foreseeable future.

The company said the board has “agreed to a proposal to dissolve the M&A Committee in recognition that this type of activity is unlikely to form a central component in the corporate strategy moving forward.”

It’s also dissolved its Cyber Advisory Panel, which looked for potential business opportunities in the internet security space.

The moves come a couple of months after member pressure forced the resignation or sacking of five members of Nominet’s board, including its CEO, in part because of a perception that diversification was harming the core .uk domains business.

But a spokesperson confirmed that the M&A ban is “across the board”, including core and non-core sectors. The decision may be revisited in future, but there are no plans to do so right now.

The PublicBenefit.uk campaign that forced the change of strategic direction had also called for lower .uk prices, more profit sent to public benefit causes, and for greater member engagement.

At its May board meeting, Nominet also agreed to an as-yet-unspecified pricing promotion, an emphasis on public benefit contributions in its budget, and the creation of a UK Registry Advisory Council.

A call for applications for seats on this Council will go out next week.